where P = Principal (starting amount); i = interest rate and n is the number of periods.

Examples

1. Joshua is investing £250 for 5 years at a compound interest rate of 3.5% APR. How much will that be worth at the end of that time?

Answer: £296.92

250 x (1 + `frac(3.5)(100)`)5

= 250 x (1.035)5

= 296.92.

2. Bacteria in a petri dish are reproducing at a rate of 65% per hour. There were initially 465 bacteria in the dish: how many will there be after a complete day? Give your answer in standard form to 3 significant figures.

Answer: 7.71 x 107

465 x (1 + `frac(65)(100)`)24 (24 hours in a day)

= 465 x 1.6524

= 77102349

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